Key Moving Average
- Spot gold key resistance is at $1835.80 (fifty day moving average).
- Spot gold two hundred day moving average is at $1823.30.
- Comex silver September three day moving average at $2464.60 is the key short term support.
- WTI crude oil one hundred day moving average is at $66.07.
This is the real summer trading. Fear, over-optimism and uncertainty are driving metals, energies, forex, stocks, bonds and crypto currencies. On one hand there is optimism that economic recovery will get overheated by next year. More jobs will be available (all over the world) than the number of working people available. On the other hand, fear, that a renewed rise in coronavirus cases will can put a temporary brake on optimistic growth forecast.
“Taper Talk” will get delayed if covid makes a big comeback this quarter. Trend of coronavirus in September will be the key. (Once summer holidays gets over in USA and Europe.). Central banks will prefer to allow inflation to zoom at the cost of economic growth and jobs creation. Any delayed “Taper Talk” will result in base metals and crypto currencies breaking past this year’s high. Silver should also break past February 2021 high of $3035.
I do not expect any new surprises in European central bank meeting tomorrow and the Federal Reserve meeting next week. Every things has been said and done before these meetings. Bond yields gap (between USA and rest of the world) will dictate price moves in forex and precious metals in the short term. US ten year yields have been very volatile since June.
Technically precious metals and industrial metals are bullish in the long term. Short term crashes should be used to invest for the long term. I prefer to buy naked far dated call options will higher strike price or invest in physical metal. Day traders and jobbers need to remain on the sidelines. One can also invest for the long term in natural gas stocks and aluminum mining stocks. (Disclosure: I have personal investment in aluminum stocks in India. I have invested for the long term.)
Spot gold: View: Current price $1808.30 (i) Key support: $179520 (ii) Key resistances: $1835.60 (iii) Gold will break free from $1795-$1835 trading range and form a new range. (ii) Use a buy on dips strategy as long as gold trades over $1790.
Buy: Buy at $1790.10 stop loss $1784.60 for $1826.00.
Sell: Sell if gold trades below $1802 after London AM fix stop loss $180780 for $1792.20 and $1784.60.
Spot silver: View: Current price: $24.88 (i) Key support: $24.38 (ii) Key resistances: $25.32 (iii) Silver has to trade over $24.30-$24.60 zone today to rise to $25.44 and $26.07. (iv) Silver will crash if it trades below $24.60 in London and USA to $24.30 and $23.66.
NYMEX CRUDE OIL (September) - current price $66.81
- Crude oil needs to trade over $64.90-$66.10 zone till next week to rise to $72.70.
- Crude oil will move into a short term bearish phase only if it trades below $64.90-$66.10 zone.
- It remains to seen how many days crude oil trades below $70.00 on daily closing basis.
- Right now crude oil price is just a correction and not even a short term bearish trend.